When I first started trading the stock market, there was not the wealth of information available online like there is today. I read a lot of books and learned the terms and thought I knew everything necessary to make my fortune trading the market. I found a discount broker and started plugging away, and immediately lost my shirt.

Even though I had read these same tips in numerous places, I really didn’t understand the importance of them until I had learned them the hard way. As they say, experience is the best teacher, if you survive the lesson.

These are things that I wish I had really used when I first started trading.

1. Never invest money you can’t afford to lose.

2. Never invest money you are afraid to lose. If you are too uptight, you are guaranteed to make bad decisions.

3. Never buy a stock you receive in an unsolicited email or in a mass mailing. Many times, these turn out to be low cost, thinly traded penny stocks that some one is trying to pump up the price and dump them.

4. Most of them time, you should not buy stocks at the open of the market. The first hour of the trading day typically has a lot of volatility. Stocks tend to stabilize after the first hour; you could end up paying too much trying to get a stock, only to have it settle down in price 30 minutes later.

5. As a new investor, never buy stocks on margin. It is ok to have a margin account; just don’t use the margin until you have enough knowledge to keep yourself out of trouble.

6. Don’t worry if you think you just missed the biggest trade of the year. Never chase a stock trying to get on board, if you wait 30 minutes, another trade will come along that is just as lucrative. (This one tip would have saved me a fortune)

7. Learn how to use a trailing stop. Immediately after buying a stock, put in a stop loss order, and keep raising the stop limit. This will preserve your gains, but more importantly will preserve your capital.

8. Never buy until you have determined when you are going to sell. You need to know what point you will accept a small loss and move on. Then when you buy, keep that stop loss point; never change this point in the heat of the battle, because this is guaranteed to cost you money.

9. Never get greedy. The old market saying is Bears make money, Bulls make money, Hogs get slaughtered is very true.

10. Don’t treat the stock market like it is your private Las Vegas gambling casino. It’s ok for a small portion of your portfolio to gamble, but it’s called investing for a reason.

If you follow these simple tips, they will save you some of the misery that I went through early in my trading career. Try not to get bogged down in all of the information overload that is coming at you from all directions. Slow down, there will plenty of good trades available to you tomorrow, if your trading capital is still available.

In this day and age of instant gratification, is “Buy And Hold” a good investment strategy? The answer is “It depends”. I know, this is taking the easy way out, but it really does depend on the individual investor.

The buy and hold strategy has several pluses and it is practiced exclusively by one of the greatest stock market investors of all times, Warren Buffet. Therefore, it can’t be all bad.

One big plus for the investor is you don’t have time to study the market, if you don’t have the time to study the charts, or you don’t have time to keep up with the news, then buy and hold is a great investment strategy for you.

Another big plus, you don’t have pay commissions for a lot of trades that eat into your profits.

Something that a lot people don’t consider is the tax benefits that come from buying and holding. It is much easier at tax time to only enter 3 or 4 trades instead of 300 to 400 trades.

The down side to the buy and hold strategy is when you try to hold on to your stocks during a bear market. You can find that a significant portion of your profits gets completely wiped out. For this reason, if you are going to utilize the buy and hold strategy, you should at least use trailing stops to preserve your gains (or more importantly, preserve your capital).

Don’t set the trailing stops too close or you will get closed out on a minor intraday correction, but don’t set them so far back that you lose a significant portion of your profits when the market has a major correction. You should also monitor your position on a regular basis to determine where the trailing stops should be placed.

The majority of the stocks used in the buy and hold strategy are the stogy old blue chips, for example, if you had bought Walmart when it first came out, you would be doing all right. However, for each Walmart there are hundreds of stocks that just barely stayed the same, you would have held on to them for minimal gain.

Another downside, most stocks tend to plateau or go down after a significant gain, so you end up holding a stock that is channeling and going nowhere. With some hands on application, your rate of return can be greatly improved. After all, the main reason you are investing is to make a return on your investment.

While I do think a portion of your portfolio should be placed in solid blue chip stocks that you tend to hold for a long period of time, I have never been a strong proponent of the buy and hold strategy. I just happen to think you can do better with a more active trading strategy. With that being said, if you plan to use a buy and hold strategy, you need to monitor your position and be prepared to get out when the market starts to go south.